Intel’s Paul Otellini and Asia

China, with its 1.3 billion population, has the advantage in the next wave of technology development because of the sheer “law of large numbers,” Intel CEO Paul Otellini said Monday night during a talk at the University of San Francisco.

Intel has invested about $2.5 billion to $3 billion in China, building factories in Chengdu and Dalian and employing about 7,000 people, the largest investment in China by a foreign company, Otellini said. It has also made substantial investments in India and Vietnam in recent years.

The United States, meanwhile, isn’t focused enough on grooming its next generation of engineers, he said. In a common refrain heard in Silicon Valley, he lamented that American universities educate and train foreign engineers, only to lose them because they can’t get visas to work in the United States. The government, he said, is too short-sighted on immigration. “We created our own brain drain,” he said.

Instead, the attention in the United States is too much on sports and Hollywood. But the the country can’t sustain itself by selling $10 DVDs. “Would you rather have a country with 50 Intels or 50 Googles or 50 Warner Brothers?” asked Otellini, who sits on Google’s board.

Then again, Otellini said he hopes the trend in environmental activism will encourage children to study science.

On a separate environmental note, Otellini said Intel is working to create carbon neutral factories, including recycling 98 percent of the water and chemicals it uses at its chip-making factories.